Apple TV Is a Money-Loser, Says Roku CEO

By Mike Schuster  MAR 28, 2014 12:10 PM

Labeling the Apple TV an "iPad accessory" that loses money, Roku CEO Anthony Wood questions why Apple would continue to sell it allegedly for a loss.

 


Of all of Apple's (NASDAQ:AAPL) current devices, the Apple TV is arguably its most frustrating.
 
Largely ignored over seven years and three (and a half) generations, the Apple TV had long been referred to as a "hobby" by the top brass. While capable in its own right, the set-top box -- with its unsightly UI and unusable-without-a-jailbreak USB port -- lacks that Apple polish that's evident in its other product lines. With Roku's more app-heavy media centers and Google's (NASDAQ:GOOG) considerably cheaper Chromecast gaining traction and support, there are few reasons to opt for the Apple TV over its competitors' offerings as they stand today.
 
In fact, at this week's Re/code Conference in Rancho Palos Verdes, California, Roku CEO Anthony Wood questioned why Apple would continue to sell the Apple TV as a glorified "iPad accessory" which, he speculates, loses money for Apple.
 
"Apple TV is essentially an accessory for the iPad. They lose money, which is unusual for Apple," Wood said. "If you're losing money, why would you want to sell more?"
 
Noting Apple's continued delays for a wholly revamped model, Wood added, "We've been competing with Apple TV for six years now, and every year, we've grown." The CEO mentioned that Roku sales doubled when Apple lowered the price of its Apple TV to $99 from $249 in 2010.
 
However, Wood's comments about Apple TV being a money-loser may not jibe with recent reports made by Apple CEO Tim Cook in February. During a shareholders meeting, Cook said the Apple TV raked in $1 billion in hardware and content sales -- though he didn't elaborate on how much of that revenue share was iTunes content, which might offset potentially loss-leading hardware. Nevertheless, Cook added, "It's a little more difficult to call it a hobby these days."
 
Be that as it may, there is definite room for improvement with the Apple TV. Money-loser or not, Apple's set-top box could stand to use a significant upgrade to better justify its $99 price tag and to gain a stronger reputation in an industry currently captivated by Google's Chromecast.

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